On January 31, 2018, rules implementing portions of the Criminal Finances Act 2017 dealing with unexplained wealth orders (UWOs) and other related measures went into effect.

The goal of this new order is to make it possible for those who get property that is above their obvious means to be obliged to justify how they obtained it legally. In effect, the burden of proof is reversed.

Often, law enforcement agencies have reason to believe that recognised assets of such people are the proceeds of severe crime. However, due to a lack of proof, they are frequently unable to freeze or recover assets under the Proceeds of Crime Act’s provisions (often due to the inability to rely on full cooperation from other jurisdictions to obtain evidence).

The following authorities may seek such an order:

  • The National Crime Agency
  • HM Revenue and Customs
  • The Financial Conduct Authority
  • The Director of the Serious Fraud Office
  • The Director of Public Prosecutions

If you are subjected to this kind of order, you must provide a statement which does the following:

  • Sets out the nature and extent of your interest in the property
  • Explains how you obtained the property, particularly how any costs involved were met
  • Provides details of any settlement if the property is held by trustees
  • Sets out any other information about the property specified in the order

In addition to a statement, it may be necessary to provide documentation related to the property if the ruling so specifies.

The High Court must be satisfied that the following criteria are met before it can issue an order:

  • There is reasonable cause to believe that the person in question holds the property and that it is worth over £50000
  • There are reasonable grounds for suspecting that this person’s known income (from lawful sources) would not be enough to obtain the property
  • The person in question is a politically exposed person (see definition below) or there are reasonable grounds for suspecting that they are or have been involved in a serious crime or someone connected to this person is or has been so involved.

A politically exposed person (PEP) is someone who is or has been entrusted with prominent public tasks by an international organisation, a State other than the UK or another EEA State, a family member, a close associate, or someone else connected to them in some manner.

Making a false or misleading statement in answer to an unexplained wealth order is a criminal offence if done knowingly or negligently. It is punishable by two years in prison and/or a fine if you do so. This crime can be prosecuted in either the Magistrates’ or Crown Courts.

Any civil forfeiture procedures may be jeopardised if the information is not provided, in whole or in part.

A UWO may be accompanied by an interim freezing order in some situations. This prevents the responder to the UWO and anybody else with a stake in the property from engaging with it in any way.

If the property is believed to be in a country other than the United Kingdom, the Secretary of State may send a request for help to the receiving country’s government. This could be a request to keep anyone in that country from dealing with the relevant property and to help manage it as needed.